Stage: I (Enquiry) Status: Complete Date commenced: 24/01/2012

During periods of high HVDC southward flow and low South Island load, the system operator has experienced issues with their market tools not converging to a secure dispatch solution.

To address this, the system operator reduces the limit on HVDC south flow.

Our analysis of such an event on 19 January 2012 indicated that the reduced limit can suppress the South Island reserve price when it is binding.

We identified three options to address the South Island reserve price suppression. Two of these were considered infeasible by the system operator. We did not consider the third option, although it provided some minor price restoration, as a viable alternative as it introduced a number of market discontinuities. We’ll continue to monitor the situation.